Ever visit a Tesla Motors dealership? The brand’s business model is even more different than its automobiles – instead of visiting a traditional car dealership or franchise, you visit a store in a strip mall. While it may seem unusual to check out a car after trying on some overpriced Varvatos duds next door, perhaps that’s the wave of the future.
And that’s what the dealer association in Ohio is afraid of. According to Green Car Reports, a group of Ohio dealers made a fuss in December, 2013 because Tesla’s dealers “did not include the required contracts with the vehicle manufacturer in their applications” to sell cars in the state, even though Tesla Motors owns their 0wn stores. The dealer association also claimed Ohio law required the manufacturer and the dealership to be two separate entities.
So why are the dealers so fearful? According to Motley Fool, dealers have lobbied for laws to protect their business model for years, which they claim keeps the prices of cars down and maintains a healthy level of competition. In fact, The Fool feels that most of the laws have more to do with campaign contributions than consumer protections. According to Tesla Motors CEO Elon Musk, in an Automotive News interview, “If franchised dealers really believe what they say when they say they’re the ones best able to sell and they can do a better job, then they should not fear competition.”
The Ohio dealer association failed in their attempt in December, so now the Ohio Senate has tried again in another manner. According to Senate Bill 260, the Ohio Bureau of Motor Vehicles (BMV) would be prohibited from issuing dealer licenses to auto manufacturers. In particular, Section 11 of the bill says that a manufacturer that is applying to sell or lease a new car or truck at retail will not receive a license to operate.
Ohio is not the only state to have anti-Tesla legislation pop up. Several states have had their respective legislation defeated, but an equal number have successfully prevented Tesla Motors from opening stores.
However, they haven’t prevented anyone from ordering a Tesla off the Internet.